The continued slowdown in inflation in March in the United States and the prospect of a bearish monetary pivot from the Fed remain the two factors anchoring the upward trend in bitcoin price. The latter is trying this week to make a technical breakout of the chart resistance at $29,000, a possible signal that needs to be confirmed on the Sunday weekend.
Inflation continues to decline in the United States, the US dollar is under downward pressure
Bitcoin (BTC) price bullish performance this year now more than 80%, including 35% for the part alone that followed the March banking crisis. Gold, silver and BTC are in the same basket of winners from the distrust of regional US banks, but the banking crisis is not behind the bull movement of BTC and precious metals.
This episode of banking stress older dynamics of capital outflows against the US dollar were maintained on the foreign exchange market. The bearish movement of the US dollar started last fall and is acting upward in the crypto market through a well-established inverse correlation effect over time.
The sources recalled the decline of the US dollar :
- The deflationary sequence began a few months ago in the United States;
- the increased likelihood of a recession in the United States;
- The proposed time horizon for the Federal Reserve Terminal (FED) rate;
- A projected downward pivot this year for the Fed’s interest rate cycle;
- In general, a gradual de-dollarization of the world economy, a desire particularly shown by some large countries in Asia.
So let’s keep that in mind bitcoin would not be at $30,000 without this general decline in the dollar on Forex and so, it is imperative that the dollar continues to decline in order for BTC to hit further upside price targets.
Regarding the technical analysis of the dollar (US, always), the market is currently testing the threshold of 101 points, a level that would accelerate the decline if broken.
Chart connecting the weekly Japanese candles (left) of the US dollar price (DXY) with the Japanese candles in daily data (right)
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Bitcoin Attacks Major Chartist Resistance at $29,000
We will now return to the graphic considerations regarding the price of bitcoin that is trying this week to overcome the major resistance of 29,000 dollars, ie the upper part of the powerful bearish gap that opened on Monday, June 13, 2022.
If this resistance is breached based on a weekly close, then the next chart targets will be at $32,500 and $34,000.
Finally, I note that the dominance of BTC is maintained under the resistance at the top of its range, little by little the witness is entering the hands of ETH and certain altcoins. If the troops start to follow the general, then it will be positive for the overall bullish pattern.
Chart showing Japanese candles in monthly bitcoin price data
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